Buying/Selling Options

Tower, the last paragraph in your posting immediately above says, "As you may have guessed, I believe good stock or futures traders are magic while good options traders are simply utilizing highly repeatable techniques...kind of like the McDonalds of trading."

You stated what you "believe". What any of us "believe" doesn't really matter. The question is, do we personally know of anyone (ourselves) included who makes consistent MONEY trading options? No doubt there are some people out there who are. I just have never met any who have.

But over the years I have met many people who have been very profitable trading underlying stocks. Personally, I use options only as a hedge, where I don't mind loosing. I look at it as loosing money on auto insurance because I didn't have an accident.

Speaking of using options as a hedge. One of my favorites is an OTM butterfly.

Bob
 
Quote from exQQQQseme:


You stated what you "believe". What any of us "believe" doesn't really matter. The question is, do we personally know of anyone (ourselves) included who makes consistent MONEY trading options? No doubt there are some people out there who are. I just have never met any who have.

But over the years I have met many people who have been very profitable trading underlying stocks. Personally, I use options only as a hedge, where I don't mind loosing. I look at it as loosing money on auto insurance because I didn't have an accident.
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Bob:

When you ask "do we personally know of anyone (ourselves) included who makes consistent MONEY trading options?" I would have to say that I do and most of these guys do not try to employ exotic trading techniques that are unique each time. They simply find strategies that work and repeat them.

I also know folks that make a good living trading futures and equities. I consider their skills to be extraordinary and, at least for me, difficult to imitate.
 
I've always wondered why option traders do not use synthetic longs/shorts? Same risk/reward as stock, with a fraction of the investment.
 
Quote from daveb351:

I've always wondered why option traders do not use synthetic longs/shorts? Same risk/reward as stock, with a fraction of the investment.
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A synthetic stock means two legs, which means two sets of commissions and slippage. Options are less liquid hence wider bi/ask spreads. And don't forget margin requirement.

Not that great after all, huh!?
 
Quote from daveb351:

I've always wondered why option traders do not use synthetic longs/shorts? Same risk/reward as stock, with a fraction of the investment.
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Who says they don't? And who wants to be long/short the stock anyway?

I've always wondered why stock traders do not use synthetic longs/shorts? Same risk/reward as stock, with a fraction of the investment.

Btw, the margin requirements for the short part of the synthetic are on some exchanges similar to those for the underlyer.

Ursa..
 
4q, then welcome to heaven, there are many here who consistently make money using options.

and you came here from the optionetics board?

welcome anyway.
 
speaking only for myself I think trading options for a living much more challenging than just stock...(unlike tower). Year over Year I could make money with stocks but I "believe" eventually I will make more money consistently trading an option book. Bottom line is there are just so many more "options" to option trading :)
 
Quote from RichardRimes:

speaking only for myself I think trading options for a living much more challenging than just stock...(unlike tower). Year over Year I could make money with stocks but I "believe" eventually I will make more money consistently trading an option book. Bottom line is there are just so many more "options" to option trading :)
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I found trading options a lot easier than stocks. I have stopped trading stocks, and now trade only options. I found I have more consistent profit with more free time for ET forums. :p
 
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